The challenge

Healthcare supply chains are under stress. Drug shortages remain at near record highs, supply costs are climbing, and staff are spending too much time on manual tasks. With supply chain now the second largest expense for hospitals after labor, the pressure to act is real.

Key statistics

• 323 active drug shortages reported at peak in 2024, still elevated in 2025
  
  
• $57 billion spent by U S hospitals on medical and surgical supplies in 2023
  
  
• Supply chain is the second largest expense after labor
  
  
• Up to one fifth of a clinician’s workweek is consumed by supply tasks
  
  
• AI improves demand forecast accuracy by 20 to 50 percent
  
  

What AI delivers

• Predicts shortages and suggests clinically approved substitutions in real time
  
  
• Reduces forecast error, cutting stockouts and overbuying
  
  
• Increases traceability and safety with better device identifier use
  
  
• Automates ordering and cycle counting, freeing staff time
  
  
• Reduces waste and lowers costs across the network
  
  

Quick wins to start now

1. Predict shortages and automate substitutions for top 100 high impact items
   
   
2. Apply AI forecasting to high variability service lines
   
   
3. Automate cycle counting in one procedural area to reduce expired stock
   
   

Bottom line

AI is no longer experimental. It is a practical response to rising costs, persistent shortages, and staff burden. Health systems that act now can protect patients, reclaim capital, and return time to care teams.